Chainalysis: Stablecoins May Surpass Bitcoin in Money Laundering Use

• Stablecoins now dominate money laundering: Chainalysis reports they account for 63% of such activities in 2024.

• They enable quick overseas remittances without KYC verification, making them ideal for criminal networks.

• In Korea, stablecoin use in fraud like voice phishing has risen, with laundered amounts ranging from thousands to millions of dollars.

Discover how stablecoins money laundering is reshaping crypto crime in 2024. Learn key trends, risks, and regulatory insights from Chainalysis and FATF reports. Stay informed—explore prevention strategies today.

What Role Do Stablecoins Play in Money Laundering?

Stablecoins money laundering involves using fiat-pegged cryptocurrencies like USDT to clean illicit funds, offering stability and speed over volatile assets like Bitcoin. According to Chainalysis research, these tokens facilitated nearly 63% of money laundering transactions in 2024, a sharp rise from previous years. Criminals favor them for seamless cross-border transfers and informal trading that bypasses identity verification, turning them into modern “back accounts” for withdrawing laundered proceeds.

How Are Stablecoins Preferred Over Bitcoin in Illicit Activities?

Chainalysis data shows stablecoins have overtaken Bitcoin in money laundering since 2021, driven by their untraceability across borders and growing market adoption. The report highlights that stablecoins’ decentralized structure allows criminals to evade government oversight, with transactions often mixed or tumbled to obscure trails. For instance, in Southeast Asia, the United Nations Office on Drugs and Crime (UNODC) noted Tether (USDT) as the dominant choice for gangs due to its versatility in converting and smuggling funds where fiat is hard to move.

The Financial Action Task Force (FATF) corroborated these findings in its June report, stating that stablecoin usage in crimes has increased significantly year-over-year, comprising the majority of blockchain-based illicit activities. Experts emphasize that while stablecoins leave blockchain records, randomized wallet addresses and over-the-counter (OTC) trades complicate tracking. Chainalysis analysts describe this shift as a “corresponding increase in illegal use mirroring stablecoin growth,” underscoring the need for enhanced monitoring tools.

Frequently Asked Questions

What Makes Stablecoins Ideal for Cross-Border Money Laundering?

Stablecoins enable easy overseas remittances by converting criminal proceeds into tokens via non-KYC exchanges or OTC deals, bypassing traditional banking hurdles. Chainalysis reports this process starts with domestic accounts, moves to cryptocurrencies like Ethereum, then swaps to stablecoins for final wallet deposits, allowing quick, low-cost transfers without fiat smuggling risks. This method supports both small-scale frauds and large operations, laundering sums from hundreds of thousands to millions of dollars efficiently.

Why Are Korean Criminals Turning to Stablecoins for Fraud?

In Korea, stablecoins are increasingly used in scams like voice phishing and second-hand market fraud, known as “Oda Jangip.” Criminals deposit victim funds into fake accounts, exchange them for stablecoins via overseas platforms, and withdraw cleanly as cash. The UNODC highlights challenges in moving fiat in regions like Korea, making stablecoins a preferred tool for versatile, hard-to-trace laundering that integrates with tactics such as stock scams and online deception.

Key Takeaways

• Stablecoins Dominate Illicit Flows: They now handle 63% of 2024 money laundering, per Chainalysis, due to stability and ease of use over Bitcoin.
• Cross-Border Advantages: No-KYC exchanges and OTC trades allow criminals to move funds globally without verification, as noted by FATF reports.
• Regulatory Gaps in Sentencing: Korean cases show lenient penalties, like suspended sentences for laundering millions, calling for stricter enforcement.

Conclusion

The rise of stablecoins money laundering in 2024, as detailed in Chainalysis and FATF analyses, signals a pivotal shift in crypto crime toward more traceable yet evasive digital assets. With UNODC insights revealing regional hotspots like Southeast Asia and Korea, where fraud proceeds fuel these schemes, authorities must prioritize blockchain surveillance and international cooperation. As stablecoin adoption grows, proactive measures will be essential to curb illicit use and safeguard the broader financial ecosystem—stay vigilant and support evolving regulations for a secure future.